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Electronic reporting of revenues, reduced VAT rates for certain supplies

On May 1, 2020, Czech will implement Electronic Reporting of Revenies (ERR) and reduce VAT rates for certain supplies.

Under the ERR, any cash payments made by customers are instantly reported to the tax authorities through the Internet. Taxpayers (e.g. retail shops) then immediately receive a code to be included on customer receipts. The Bill will extend the ERR regime to taxpayers in all sectors. However, subject to conditions, the smallest entrepreneurs would have the option to apply the off-line ERR regime (i.e. use official receipts’ books distributed by the tax authorities).

To support the adoption of the ERR, the Bill will also reduce to 10% the VAT rate on the following supplies:

  • water supply and sewage (currently, 21%);
  • certain crafts and professional services, including the services of hairdressers, repairs of bicycles, shoes and textiles for households and housekeeping services (currently, 21%); and
  • catering services, including the supply of non-alcoholic beverages (currently, 15%) and draft beer (currently, 21%); and
  • cut flowers and decorative leaves (currently, 15%).